News
Trade4go
Dec 27th, 2024
Original content
In the European Union (EU), the recent EU-Mercosur trade agreement finalized on December 6 has sparked debate within Spain's agri-food sector. The Spanish Government views it as an opportunity to boost exports, reduce tariffs, and strengthen the sector, benefiting products like olive oil, wine, pork, and grains. Protective measures, including tariff quotas and safeguard clauses, aim to shield sensitive products like beef and poultry while maintaining European food safety standards.
However, organizations like the National Association of the Meat Industry of Spain (ANAFRIC) and beef sector representatives strongly oppose the agreement, citing risks of unfair competition and threats to local production. They warn that increased beef imports from Mercosur, produced under less stringent regulations, could undermine EU sustainability goals and harm jobs in the meat industry. Critics argue that the agreement fails to ensure fair competition and contradicts European environmental policies.
Groups like the Spanish Association of Beef Cattle Producers (Asoprovac) emphasize the challenges European livestock farmers face due to restrictive policies and declining profitability. They call for dialogue and reassessment to address concerns about rural livelihoods, local production, and fair competition, highlighting the need for a balanced approach to safeguard European agriculture’s future.
The European Parliament has approved a one-year delay in implementing the European Union Deforestation Regulation (EUDR), initially set to take effect on December 30, 2024. Aiming to prohibit imports of products like soybeans and beef linked to deforestation, this law has now been postponed to allow EU countries to finalize their decisions on the delay within a week. While EUDR is a key component of the EU's green policy, it has faced opposition from various industries, arguing that such climate measures are too burdensome. Countries like Brazil and Indonesia have criticized the law, calling it protectionist and claiming it could harm small farmers by excluding them from the EU market.
The EUDR would have required importers of key commodities, such as soybeans, beef, palm oil, and coffee, to prove that their supply chains do not contribute to deforestation. The law also included provisions preventing EU farmers from exporting products grown in deforested or degraded areas. Despite efforts by Members of the European Parliament (MEPs) to amend the law, the provisions were largely maintained, leading to the postponement rather than a repeal. According to Global Witness, an international non-governmental organization (NGO), deforestation linked to EU imports contributed to emissions of at least 120 million metric tons (mmt) of carbon dioxide (CO₂) between 2021 and 2022, underscoring the environmental impact that the law seeks to address.
The Argentine beef sector experienced a mixed scenario in 2024, with production, domestic consumption, and slaughter declining, while exports reached record levels despite fluctuating international prices. In Nov-24, cattle slaughter fell by 8.2% year-on-year (YoY), particularly affecting steers, which saw a 20.1% YoY reduction. Female slaughter also decreased, especially cows, reflecting potential retention by producers amid economic and climatic uncertainties. However, heifer slaughter showed a smaller decline, representing a historic 48.5% of the total, highlighting their growing importance in the sector.
On the consumption side, domestic beef consumption dropped to its lowest level in 22 years in Nov-24, falling by 11.1% YoY, averaging 47.4 kilograms (kg) per person. Despite this, beef exports surged, with volumes increasing by 14.5% compared to 2023, totaling 528.1 thousand metric tons (mt). China remained the largest destination, accounting for 68.3% of exports, although beef prices fell by 12.7% YoY. Other markets, including Israel, the United States (US), and Germany, saw significant growth. Despite price drops in some international markets, total export revenues increased by 7.4% YoY. Domestically, live cattle prices rose by 7.6% YoY, and beef cuts saw a 2.8% YoY increase, reflecting the sector’s efforts to adjust to internal and external challenges.
Brazil’s beef sector faced a challenging yet transformative year, marked by recovering cattle prices and expanding exports to key markets like the US, Mexico, and Japan. According to Friboi, a leading global brand in the beef industry, exports grew significantly in 2024, accounting for 34% of Brazil’s production, while domestic consumption remained dominant at 66%. Friboi highlighted the impact of earlier livestock farming practices, which increased the supply of young cattle and reshaped the production chain.
Focusing on cattle aged up to 30 months, the implementation of earlier livestock farming increased the supply of animals ready for slaughter. This approach enhanced the overall availability of beef in the market, creating opportunities for growth in both local and foreign trade. This supply growth supported both domestic and export markets, helping stabilize cattle prices.
Exports played a vital role in sustaining prices, especially in high-demand markets like Asia, Europe, and the US. These developments underline the sector’s resilience and adaptability to shifting market demands.
Brazil’s cattle slaughter is projected to reach 36.485 million heads in 2025, marking a 5.63% decrease from the record 38.661 million heads estimated for 2024. This drop is attributed to the reversal of the livestock cycle, where farmers retain female cattle to rebuild their herds for long-term sustainability. Despite this decline, 2025 will still see the second-highest slaughter volume in Brazil's history, solidifying the country's position as a major player in the global beef market. The adjustment in the livestock cycle highlights the sector’s adaptability and commitment to maintaining high production levels while ensuring future sustainability.
The Environmental Protection Agency (EPA) has reported significant reductions in greenhouse gas (GHG) emissions from the Irish agriculture sector for Q2-2024 compared to Q2-2023. Overall, GHG emissions were down by 4.1% YoY, with the agriculture sector contributing a 4.6% decrease. The primary factors driving this reduction included a 1.9% YoY decrease in the national herd, a 4.4% YoY drop in milk production, and reductions in the sales of inorganic nitrogen fertilizer (-13.6% YoY) and limestone (-23.0% YoY). Among specific agricultural activities, manure management saw the largest decrease in emissions, falling by 14.1% YoY, followed by agricultural soils at 6.8% YoY.
However, the EPA also highlights a contrast in Q1-2024, where GHG emissions from agriculture increased by 5.2% YoY due to adverse weather conditions that delayed fertilizer applications. The increase was largely driven by a 106% YoY rise in inorganic nitrogen fertilizer sales, reflecting the delayed application caused by poor weather and ground conditions. Despite this quarterly increase, the overall trend for agriculture emissions remains downward YoY, suggesting continued progress in reducing emissions within the sector, driven by changing practices and weather-related adjustments.
The South Korean government aims to innovate Korean beef production by introducing low-carbon, short-term fattening methods for Hanwoo farms. The goal is to reduce production costs by shortening the breeding period to 24 months and increasing the incidence of grade 1+ beef, boosting farmers' income. The Ministry of Agriculture, Food and Rural Affairs (MAFRA) plans to offer ongoing policy and financial support to encourage Hanwoo breeding farms to adopt these production innovations, including promoting advanced livestock breeding and low-carbon certification systems.
A key example of this innovation is Jungwoo Livestock in Gochang-gun, which has implemented short-term fattening and greenhouse gas reduction practices. This farm has reduced the average raising period of steers by seven months compared to the national average and achieved a 78.6% rate of grade 1+ beef. In addition, it has received low-carbon certification for its beef and is selling products to private distributors like Lotte Department Store and Homeplus. During a recent visit, the Director of MAFRA's Food Policy Bureau emphasized the need for widespread adoption of short-term fattening methods and collaboration with cooperatives and distributors to scale up the production and distribution of low-carbon Hanwoo beef.
.png)
In W51, Brazil's wholesale price for boneless rear beef declined by 0.67% week-on-week (WoW) to USD 4.96/kg. This also marked a 1.82% month-on-month (MoM) drop and a 4.14% YoY decrease. Despite this, prices in Brazilian real remained steady at BRL 30/kg for the sixth consecutive week, with exchange rate fluctuations being the primary driver of the decline in USD terms. According to Safras and Mercado, wholesale beef prices have stabilized, with limited potential for immediate increases. Retailers are already well-stocked for the holiday season, reducing the likelihood of significant price shifts in the short term.
Additionally, higher beef prices have made alternative proteins like chicken more appealing to consumers, further softening demand. The stock transition between wholesale and retail is expected to lose momentum, as current inventories are sufficient to meet festive season needs. The rising preference for affordable substitutes like chicken meat cuts continues to shape consumption dynamics.
In W51, Australia's National Young Cattle Indicator averaged USD 2.23/kg, reflecting a 1.07% WoW decline but a 0.62% MoM increase and a 22.65% YoY rise. Despite the weekly drop, the cattle market remained firm, consistent with trends observed in the previous month. The heifer market saw an uptick, with steers also following suit, maintaining a 28% gap between restockers. Although feeder steer prices rose, reduced yardings pointed to a softening demand for feeder animals.
In W51, the price for lean beef (92% to 94%) in the US averaged USD 7.47/kg, reflecting a marginal 0.01% WoW decline. This marked the 15th consecutive week of price reductions, reaching its lowest level since W12. The price also registered a 2.09% MoM decrease. However, lean beef prices remain 26.15% YoY higher, driven by a tightening domestic supply caused by a shrinking cow herd. The recent decline aligns with the typical seasonal dip in winter demand following peak summer consumption. Despite this, ongoing limited production continues to sustain relatively high lean beef prices overall.
In W51, Argentina's average steer beef price dropped to USD 2.20/kg, reflecting a 0.51% WoW decline and a 0.64% MoM drop but a 25.93% YoY increase. According to the Chamber of Industry and Commerce of Meat and Derivatives of the Argentine Republic, domestic consumption continues to fall, with an annual average of 47.4 kg per capita. This marks an 11.1% drop compared to the same period in 2023, marking the lowest level in 22 years. Despite this consumption decline, market demand remains strong, with significant price increases observed for young bulls, females, and steers, reaching historic highs in several categories. Market trends show a seasonal supply drop with calves for rearing and fattening typically available from June to July, leading to a decline in volumes by November. Experts expect prices to remain stable until Feb-25, when new wintering lots are anticipated to enter the market. However, unique demand-side factors this year have prevented the full realization of potential price increases.
The Spanish Government should prioritize implementing robust monitoring mechanisms to enforce protective measures like tariff quotas and safeguard clauses under the EU-Mercosur agreement. Strengthening transparency and accountability in trade practices will help ensure fair competition for local producers. Additionally, initiating collaborative discussions with beef sector representatives, such as ANAFRIC, can address their concerns while balancing export opportunities for other agri-food products.
Prepare for Long-Term Compliance Amid EUDR Implementation Postponement
Agricultural exporters, particularly in the beef sector, should proactively adapt their supply chains to meet EUDR compliance standards despite the one-year delay. This includes investing in traceability systems, sustainable sourcing, and collaborations with smaller farmers to avoid market exclusion. Advocacy for clearer guidelines and support mechanisms from the EU can also ease the transition and reduce opposition from impacted industries.
Argentina’s beef sector should focus on boosting domestic consumption through promotional campaigns, emphasizing the nutritional and cultural value of beef. Concurrently, diversifying export markets beyond China to regions with growing demand, such as the Middle East and Africa, can mitigate the impact of price volatility. Investment in sustainable production practices will also enhance competitiveness and align with evolving global standards.
The South Korean government should establish incentive programs for Hanwoo farms adopting low-carbon, short-term fattening methods including financial subsidies and tax breaks. Encouraging partnerships between farms, cooperatives, and retailers like Lotte Department Store can accelerate the distribution of certified products. Public awareness campaigns highlighting the environmental and economic benefits of low-carbon Hanwoo beef can further stimulate consumer demand.
Sources: Tridge, Agriland, Agromeat, UkrAgroConsult, Canal Rural, Nongup, Noticias Agropecuarias
Read more relevant content
Recommended suppliers for you
What to read next
